This stock is cheap! The Low price earnings story / myLot

India

December 22, 2006 11:01am CST

When Price Earning ratio is low for a stock, does it mean the stock is cheap? Not necessary.. The price may be low for various reasons that can also be valid. Ur say?

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1 response

nw1911guy

@nw1911guy (1131)

• United States

25 Jan 07

I would say, not only look at the price to earnings ratio. But look at how much stock is held by the personnel of the companies. Also, how much debt to income do they have? Is it a small cap or large cap stock?. Personnally I like small caps with lots of free cash and almost no debt with the present management still owning a lot of the stock. Oh also, what do you think the potential for growth is?

dhanan

@dhanan (61)

• India

26 Jan 07

Hi bonney lake, According to me, potential for growth is the ability of the product or services that the company provide so as to sustain its business in future. In other words, it is the economic moat the co have or it will have in coming years. Competitive ability is what i look for. By the way, I work for hedge fund as equity research analyst. Tell me abt urself.. Dhananjayan, http:\\valuehunt.blogspot.com